Oil hits three-month high on falling oil stocks, investor optimism

By Collin Eaton HOUSTON (Reuters) - Oil prices rose to the fourth consecutive weekly gain on Friday, steadying at three-month highs after new data showed U.S.

Reuters December 28, 2019 02:06:56 IST
Oil hits three-month high on falling oil stocks, investor optimism

Oil hits threemonth high on falling oil stocks investor optimism

By Collin Eaton

HOUSTON (Reuters) - Oil prices rose to the fourth consecutive weekly gain on Friday, steadying at three-month highs after new data showed U.S. crude inventories fell far more than expected, while upbeat economic data and optimism over a U.S.-China trade deal fueled a year-end stock market rally.

Brent crude rose 24 cents to settle at $68.16 a barrel, the highest since mid-September. The international benchmark has climbed nearly 27% since the end of 2018.

West Texas Intermediate rose 4 cents to settle at $61.72 a barrel, another three-month high. The U.S. benchmark has risen 36% so far this year.

U.S. crude stocks fell by 5.5 million barrels in the week to Dec. 20 to 441.4 million barrels, according to the Energy Information Administration, far exceeding analysts' expectations of a 1.7 million-barrel drop.

"Inventories are bullish almost across the board," said Josh Graves, senior market strategist at RJO Futures in Chicago.

A year-end stock market rally also helped lift oil prices as consumer sentiment continued to improve, he said.

"It's a Santa Claus rally. People tend to buy more things that will indirectly drive the price of oil up," Graves said.

U.S. stock indexes rose slightly on Friday, with the S&P 500 index <.SPX> close to logging its best year since 1997. The Nasdaq <.IXIC> crossed the 9,000 point mark for the first time on Thursday.

U.S. energy firms idled eight working oil rigs, the first reduction in three weeks, as producers followed through on plans to slash spending, energy services firm Baker Hughes Co said in its closely followed report on Friday.

Oil trade was thin. But oil-market sentiment improved as new data showed profits at China's industrial firms rose at the fastest pace in eight months in November, according to the National Bureau of Statistics.

In the United States, a survey showed on Thursday online holiday purchases by U.S. consumers reached a record, beating analysts' expectations and lifting U.S. stocks to fresh highs.

China and the United States cooled their 17-month trade war earlier this month, announcing a Phase 1 agreement that would reduce some U.S. tariffs.

The Organization of the Petroleum Exporting Countries and its allies including Russia, known as OPEC+, this month decided to prolong an oil output restriction deal until the end of March and to deepen the cuts in order to balance out the oil market.

But OPEC+ may consider wrapping up their oil output reduction in 2020, Russian Energy Minister Alexander Novak said on Friday.

(Additional reporting by Bozorgmehr Sharafedin in London and Aaron Sheldrick in Tokyo, editing by Alistair Bell, Steve Orlofsky and Cynthia Osterman)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.